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Are These Two Retail Stocks Undervalued Right Now?
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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is Abercrombie & Fitch (ANF - Free Report) . ANF is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 9.74 right now. For comparison, its industry sports an average P/E of 14.07. ANF's Forward P/E has been as high as 2,563.40 and as low as -15,170, with a median of 23.69, all within the past year.
Investors will also notice that ANF has a PEG ratio of 0.54. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ANF's PEG compares to its industry's average PEG of 0.77. ANF's PEG has been as high as 142.41 and as low as -842.78, with a median of 1.32, all within the past year.
Investors should also recognize that ANF has a P/B ratio of 2.37. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. ANF's current P/B looks attractive when compared to its industry's average P/B of 5.07. Over the past year, ANF's P/B has been as high as 3.04 and as low as 1.05, with a median of 2.27.
Another stellar value stock you could consider is Urban Outfitters (URBN - Free Report) , which is a Zacks Rank #2 (Buy) stock with a Value Score of A.
Shares of Urban Outfitters are currently trading at a forward earnings multiple of 8.62 and a PEG ratio of 0.48 compared to its industry's P/E and PEG ratio of 10.96 and 0.64, respectively. Over the past year, Urban's P/E has been as high as 204.23, as low as -429.95, with a median of 16.55; its PEG ratio has been as high as 16, as low as 0.51, with a median of 1.39 during the same time period.
Additionally, URBN boasts a P/B ratio of 1.69 while its industry's price-to-book ratio sits at 3.18. For the retailer, this valuation metric has been as high as 2.75, as low as 1.59, with a median of 2.1 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Abercrombie & Fitch and Urban Outfitters are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ANF and URBN feel like a great value stocks at the moment.
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Are These Two Retail Stocks Undervalued Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is Abercrombie & Fitch (ANF - Free Report) . ANF is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 9.74 right now. For comparison, its industry sports an average P/E of 14.07. ANF's Forward P/E has been as high as 2,563.40 and as low as -15,170, with a median of 23.69, all within the past year.
Investors will also notice that ANF has a PEG ratio of 0.54. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ANF's PEG compares to its industry's average PEG of 0.77. ANF's PEG has been as high as 142.41 and as low as -842.78, with a median of 1.32, all within the past year.
Investors should also recognize that ANF has a P/B ratio of 2.37. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. ANF's current P/B looks attractive when compared to its industry's average P/B of 5.07. Over the past year, ANF's P/B has been as high as 3.04 and as low as 1.05, with a median of 2.27.
Another stellar value stock you could consider is Urban Outfitters (URBN - Free Report) , which is a Zacks Rank #2 (Buy) stock with a Value Score of A.
Shares of Urban Outfitters are currently trading at a forward earnings multiple of 8.62 and a PEG ratio of 0.48 compared to its industry's P/E and PEG ratio of 10.96 and 0.64, respectively. Over the past year, Urban's P/E has been as high as 204.23, as low as -429.95, with a median of 16.55; its PEG ratio has been as high as 16, as low as 0.51, with a median of 1.39 during the same time period.
Additionally, URBN boasts a P/B ratio of 1.69 while its industry's price-to-book ratio sits at 3.18. For the retailer, this valuation metric has been as high as 2.75, as low as 1.59, with a median of 2.1 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Abercrombie & Fitch and Urban Outfitters are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ANF and URBN feel like a great value stocks at the moment.